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Moody's: Brighter Operating Environment to Lay Foundation for Stable Earnings of Developers
Recommend 26 Positive 33 Negative 13 |
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Moody's said Hong Kong's property market is recovering progressively, in light of improving office leasing demand and a rebound in retail sales alongside the recovery in tourism. These trends narrowed the downfall in office rents and bolstered retail rental income, although high vacancy rates and still-elevated supply continued to suppress the office market. Unless global financial conditions tighten radically, overall earnings of developers were expected to remain broadly stable. Moody's predicted that the aggregate EBITDA of rated companies will stay largely in line with 2025 levels during 2026-27. Office market conditions are gradually stabilizing, but ongoing new supply is constraining the pace of recovery. Over the past year, leasing demand strengthened, supported by revived capital market activity and a more active initial public offering pipeline, lifting spot rents in core districts. However, overall vacancy rates remained at their highest level in a decade, and renewal rents continued to edge down. Despite interest rate hike risks, residential sales are set to recover. Since mid-2025, home prices have rebounded, on the back of lower mortgage rates and demand from mainland buyers. Moody's expected developers' earnings will not be materially affected by potential rate hikes, as most projects to be recognized this year were pre-sold and profits have been locked in at lower development margins. Auto-translated by AI This article was automatically translated by AI, the original language version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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